easy · Corporate Credit Analysis
What is the primary difference between EBIT / Interest and EBITDA / Interest?
- EBIT/Interest is always higher than EBITDA/Interest.
- The latter adds back non-cash depreciation and amortization, usually resulting in a higher coverage multiple.
- The former is used for banks, while the latter is used for industrial companies.
- EBITDA includes interest income, while EBIT excludes it.
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